US West stakes Net device firm

Telephone company US West said today it has agreed to take a small stake in start-up Netpliance, boosting the giant's drive to push its Net connections beyond personal computers.

Netpliance is one of several small companies backing "Internet appliances,"
or scaled-down computers designed specifically for accessing the Web or
email, without being able to run more advanced programs like word processing
or game software. Its "i-opener," manufactured by Taiwan's Quanta Computer,
provides a keyboard and flat screen for quick consumer Net and email access.

This kind of device has yet to reach the mainstream market. But big firms ranging from Intel to Microsoft have now thrown their weight behind the slimmed-down devices, betting they can expand Net use for people baffled by a personal computer.

That goal has also drawn the interest of the big telecommunication companies, which are looking to boost use of their Internet services. Pacific Bell offers a small device that connects to telephones that allows people to check email, while US West has already begun offering a WebTV-like service enabling customers to surf the Web through their television.

US West sees the Net appliance drive as a complement to its Net-over-TV system, which also is geared at bringing non-PC users online.

"We think Net appliances are a terrific mass market product," said Ophyll D'Costa, the company's vice president for business development. "At the price (we will offer this), I think we are going to be able to reach those customers who have not traditionally bought PCs."

The Netpliance investment isn't the company's first foray into the market.
As earlier reported, US West has
already agreed to distribute Intel's device, and D'Costa said the company
is talking to other Net device makers as well.

US West plans to distribute the i-opener soon, and will later persuade
its users to switch their Internet access service to US West.net connections. The device itself costs $199, but consumers pay another monthly charge for their Internet access.

The companies are not releasing details on the investment, but US West said
its new equity stake in Netpliance was less than 10 percent. Last month the
start-up filed to raise close to $100 million in an initial public stock
offering.